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The Right Reverend Charles G. vonRosenberg v. The Right Reverend Mark J. Lawrence

United States District Court, D. South Carolina, Charleston Division

September 19, 2019

The Right Reverend Charles G. vonRosenberg, et al., Plaintiffs,
The Right Reverend Mark J. Lawrence, et al., Defendants. The Episcopal Church, Plaintiff in Intervention


          Richard Mark Gerget United States District Court Judge

         Order This matter is before the Court on Plaintiff-in-Intervention The Episcopal Church's Motion to Exclude the Genericness Expert Report of Hal Poret (Dkt. No. 580), Defendants The Right Reverend Mark J. Lawrence, et al.'s Motion to Exclude Walter Edgar (Dkt. No. 585), Defendants The Right Reverend Mark J. Lawrence, et al.'s Motion to Exclude Mark Keegan (Dkt. No. 597) and Defendants The Right Reverend Mark J. Lawrence, et al. 's Motion to Exclude Robert L. Klein (Dkt. No. 598).[1]

         I. Background

         This case arises out of a schism in 2012 in the Historic Diocese, originally known as the "Protestant Episcopal Church in the State of South Carolina, " in which certain members and parishes sought to dissociate from The Episcopal Church, a nationwide hierarchical church. The parties have litigated property issues relating to the schism in the state courts of South Carolina, culminating in a 2017 decision in the South Carolina Supreme Court, and have raised in this action issues surrounding the use of certain federal and state law marks in contest between the national church and its affiliates and the disassociating diocese and its affiliates. As in separate Orders, it is important to identify the major parties in this dispute. The parties are as follows:

1. Plaintiff The Episcopal Church of the United States (hereafter "TEC") is the national church and an Intervenor Plaintiff in this action;
2. The Protestant Episcopal Church in the State of South Carolina (hereafter the "Historic Diocese"), which was formed as early as 1785 and has long affiliated with TEC;
3. Plaintiff The Episcopal Church in South Carolina (hereafter "TECSC"), which was headed initially by Plaintiff Bishop Charles G. vonRosenberg and subsequently by Plaintiff Provisional Bishop Gladstone B. Adams, III and is affiliated with TEC;
4. Defendant The Diocese of South Carolina (hereafter "Disassociated Diocese"), headed by Defendant Right Reverend Mark Lawrence and was formed following the schism in 2012 to disassociate from TEC; 5. The Defendant parishes associated with the Disassociated Diocese (hereafter "Disassociated Parishes").

         In conjunction with the summary judgment briefing, the Parties have filed four Daubert motions to exclude or limit the testimony of the opposing Parties' experts. (Dkt. Nos. 580, 585, 586, 597, 598.) Each one has been fully briefed, with opposing Parties responding to the motion and the moving Party filing a reply. (Dkt. Nos. 617, 623, 639, 640, 648.)

         II. Legal Standard

         Under Rules 104(a) and 702 of the Federal Rules of Evidence, "the trial judge must ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable." Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 589 (1993). Thus, even if a witness is "qualified as an expert by knowledge, skill, experience, training or education, " the trial court must ensure that (1) "the testimony is the product of reliable principles and methods, " that (2) "the expert has reliably applied the principles and methods to the facts of the case, " and (3) that the "testimony is based on sufficient facts or data." Fed.R.Evid. 702(b) - (d). "This entails a preliminary assessment of whether the reasoning or methodology underlying the testimony is scientifically valid, " Daubert, 509 U.S. at 592 - 93, and whether the expert has "faithfully appl[ied] the methodology to facts, " Roche v. Lincoln Prop. Co., 175 F.App'x 597, 602 (4th Cir. 2006).

         Factors to be considered include "whether a theory or technique...can be (and has been) tested, " "whether the theory or technique has been subjected to peer review and publication, " the "known or potential rate of error, " the "existence and maintenance of standards controlling the technique's operation, " and whether the theory or technique has garnered "general acceptance." Daubert, 509 U.S. at 593 - 94. However, these factors are neither definitive nor exhaustive, United States v. Fultz, 591 F.App'x 226, 227 (4th Cir. 2015), cert, denied, 135 S.Ct. 2370 (2015), and "merely illustrate[] the types of factors that will bear on the inquiry." United States v. Hassan, 742 F.3d 104, 130 (4th Cir. 2014). This is especially true as the Daubert standard applies to non-scientific expert testimony as well. Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999).

         The Court is mindful that the Daubert inquiry involves "two guiding, and sometimes competing, principles." Westberry v. Gislaved Gummi AB, 178 F.3d 257, 261 (4th Cir. 1999). "On the one hand, ... Rule 702 was intended to liberalize the introduction of relevant expert evidence, " id., and "the trial court's role as a gatekeeper is not intended to serve as a replacement for the adversary system." United States v. Stanley, 533 Fed.Appx. 325, 327 (4th Cir. 2013) citing Fed. R. Evid. 702 advisory committee's note. On the other hand, "[b]ecause expert witnesses have the potential to be both powerful and quite misleading, ' it is crucial that the district court conduct a careful analysis into the reliability of the expert's proposed opinion." United States v. Fultz, 591 F.App'x 226, 227 (4th Cir. 2015) quoting Cooper v. Smith & Nephew, Inc., 259 F.3d 194, 199 (4th Cir. 2001).

         III. Discussion

         A. The Episcopal Church's Motion to Exclude Hal Poret (Dkt. No. 580)

         Plaintiffs move to exclude the report produced by Defendants' expert, Hal Poret, which reported on a "Teflon" survey[2] conducted by Poret to assess the genericness of TEC's mark "The Episcopal Church." (Dkt. Nos. 580; 586.) As an overview of Poret's survey, Poret asked respondents to choose whether certain names constituted a "trademark name, " which was defined as being used by "one organization, or by branches of that organization, " or a "category name" which was defined as "a name that identifies a category that can include various organizations that are not affiliated with each other" and "can be used by more than one organization to identify what type of organization they are." (Dkt. No. 586-1 at 8) (emphasis added). The survey gave, as an example, "Chase Bank" and "The Democratic National Committee" as "trademark name[s], " and "Savings Bank" and "The Liberal Left" as a "category name[s]." (Id. at 9 - 10.) After asking whether the respondents understood the difference, they were then asked a test question juxtaposing "The American Medical Association, " intended to be a "trademark name, " versus "The Medical Profession, " intended to be a "category name." (Id. at 10-11.) Respondents who answered correctly were then asked a series of questions regarding whether certain names in the "area of religious organizations or institutions" were "trademark names" or "category names." (Id. at 11.) Six terms in total were shown. (Id. at 12 - 13.) Relevantly, the survey asked whether "The Episcopal Church" was a "trademark name" or a "category name" and, according to Poret's survey, 43.7% of respondents stated that "The Episcopal Church" is a "trademark name" while 55.3% stated it to be a "category name." (Id. at 18.)

         The Court finds that Poret's survey must be excluded for four independent reasons, each sufficient to mandate exclusion: first, the Fourth Circuit's decision in Hunt Masters forecloses the relevance of survey evidence to determine the weight of public perception of a non-coined term; second, because Poret's survey fails to determine whether the public perceives "The Episcopal Church" to denote a religion; third, because Poret's survey's use of the terms "category" and "trademark" are confusing and likely lead to irrelevant responses, and; finally, Poret's use of the term "trademark" makes a legal conclusion. The Court addresses each in turn.

         Fourth Circuit precedent prohibits consideration of Poret's survey here. As the Plaintiffs correctly argue, Poret's Teflon survey is, as a matter of law, inadmissible under Hunt Masters, Inc. v. Landry's Seafood Rest., Inc., 240 F.3d 251 (4th Cir. 2001). In Hunt Masters, the Fourth Circuit explained that there were two ways in which a product could be generic: "1) where the term began life as a 'coined term'[3]; and (2) where the term was commonly used prior to its association with the products at issue." Id. at 255. The court went on to explain that looking to consumer understanding is important for a "coined word" that has "become generic though common usage." Id. The court concluded that since the term in Hunt Masters, "crab house, " was not a coined term, "it is not necessary to determine whether the term has become generic through common use, rendering Hunt's customer survey irrelevant." Id. This holding, finding survey evidence irrelevant where alleged genericness was based on alleged prior generic use, has been repeated by multiple courts of appeal. See Schwan's IP, LLC v. Kraft Pizza Co., 460 F.3d 971, 976 (8th Cir. 2006) (citing Hunt Masters and holding that "Brick Oven was commonly used before either party began labeling their frozen pizzas with the term, and it was not error for the district court to omit the survey evidence from its genericness analysis."); Miller Brewing Co. v. Joseph Schlitz Brewing Co., 605 F.2d 990, 995 (7th Cir. 1979) ("When Judge Learned Hand said that whether a word is generic depends on what 'buyers understand by the word, '.. .he was referring to a coined word for a commercial product that was alleged to have become generic through common usage. He was not suggesting that the meaning of a familiar, basic word in the English vocabulary can depend on associations the word brings to consumers as a result of advertising.").[4] Each party here acknowledges that the words making up "The Episcopal Church" was used, in some form, prior to TEC's adoption of the mark, [5] and therefore Poret's survey is irrelevant as it is not being used to assess a coined term which has become generic. (Dkt. Nos. 586 as 12; 610-1 at 6; 623 at 5.)

         In addition to the decisions of the Fourth Circuit and other Courts of Appeal, the United States Patent and Trademark Offices and at least one district court have applied Hunt Masters and other courts' decisions to exclude a defendant's survey evidence where the case does not involve a coined term. See Nat'l Nonwovens, Inc. v. Consumer Prod. Enterprises, Inc., 397 F.Supp.2d 245, 254 (D. Mass. 2005) (excluding plaintiff and defendant surveys where "neither party contends that the Plaintiff invented the term 'wool felt' or that it has since become 'genericized[, ]'" and holding that surveys presented by plaintiffs and defendants were irrelevant as "Defendant argues that Plaintiff has appropriated a generic term, while Plaintiff argues that the term 'wool felt' is 'merely descriptive' for a product that is known generically as 'felted wool fabric.' In either case, the 'primary significance' test for genericness is inapposite, and survey evidence is therefore unnecessary."); Frito-Lay N. Am., Inc. v. Princeton Vanguard, LLC, 124 U.S.P.Q.2d 1184, *13, *22 (T.T.A.B. 2017) (holding as to both parties' surveys, "we note that various courts have found that Teflon surveys are only appropriate to consider in a case where the question is whether a coined or arbitrary mark has become generic, and is not appropriate to prove recognition of an otherwise not inherently distinctive mark. We discuss this issue in more detail, infra, but note initially that we agree with those circuit court decisions that Teflon surveys are not relevant when a term is not inherently distinctive.").

         Indeed, Defendants here recognize this distinction, noting that surveys would not be relevant to the analysis of whether Plaintiffs' marks were generic ab initio as a generic term cannot acquire distinctiveness. (Dkt. No. 623 at 4.) Defendants cannot have it both ways: they argue that Plaintiffs co-opted a generic phrase from the public domain, not that widespread use of a coined phrase has caused it to become generic.[6] While they have failed to create any dispute of material fact on this point, with their own experts explaining that "The Episcopal Church was a descriptive phrase for "churches who either were current or former parishes in the Church of England" (Dkt No. 609-6 at 4), they cannot now rely on survey evidence to determine the weight of public perception of a non-coined term under Hunt Masters.[7]

         Yet, regardless of the Fourth Circuit's decision in Hunt Masters, Poret's survey is inadmissible as it is irrelevant to the determination of whether TEC's mark here, "The Episcopal Church, " is generic. The Court has, in a separate Order, explained this issue at length but, in brief, it is clear from the decisions of multiple courts of appeal that a mark for a denominational organization is generic where it names a religion but is descriptive where it properly differentiates a specific denominational organization offering religious services. See TE-TA-MA Truth Found.--Family of URI, Inc. v. World Church of Creator, 297 F.3d 662, 666 (7th Cir. 2002) ("A mark is 'generic' when it has become the name of a product (e.g., 'sandwich' for meat between slices of bread) or class of products (thus 'church' is generic)" but finding mark not generic where "[i]t does not name the class of monotheistic religions[, as] [i]n the contemporary United States, variations on 'Church of [Deity]' are used to differentiate individual denominations, not to denote the class of all religions."); Jews For Jesus v. Brodsky, 993 F.Supp. 282, 297 (D.N.J.), aff'd, 159 F.3d 1351 (3d Cir. 1998) ("although the Plaintiff Organization sometimes refers to its members as 'Jews' who are 'for Jesus, ' during the past twenty-four years the Plaintiff Organization has consistently used the phrase 'Jews for Jesus' to refer to the organization itself"); Gen. Conference Corp. of Seventh-Day Adventists v. McGill, 617 F.3d 402, 413 (6th Cir. 2010) ("It would be inappropriate to conclude as a matter of law... that the public considers 'Seventh-day Adventist' to refer generically to a religion."); Cmty. of Christ Copyright Corp. v. Devon Park Restoration Branch of Jesus Christ's Church, 634 F.3d 1005, 1011 (8th Cir. 2011) (finding mark not generic where defendant could not demonstrate that "registered marks have become generic because they identify religion, not COC as an institution."). Therefore, Poret's survey fails to ask the relevant question for genericness here.

         Poret's survey asks about a "trademark name" versus a "category name." (Dkt. No. 586-1.) The flaw, however, is that, in the religious sphere, the name of a denomination, such as "Seventh-day Adventist" discussed by the Sixth Circuit in Gen. Conference Corp. of Seventh-Day Adventists, 617 F.3d 402, can also serve as a category of affiliated religious institutions. The proper question, therefore, is whether a mark refers to an organization or a religion.[8] This issue is further heighted by the flawed terms used in Poret's survey. As already explained in a separate Order, Poret's survey defines "category name" as "a name that identifies a category that can include various organizations that are not affiliated with each other" and "ca« be used by more than one organization to identify what type of organization they are." (Dkt. No. 586-1) (emphasis added). Based on that definition, a respondent could mark "category, " the response coded as generic, for a term that "can" be, but is not necessarily, used by organizations that are not affiliated with each other. (Dkt. No. 586-1 at 8.) Notably, the "can" in that sentence permits the opposite to be true as well: a respondent could choose "category" if the mark refers to a "type of organization" that is affiliated with another organization. Therefore, a Respondent could mark "category" if they perceived "The Episcopal Church" to be a descriptive term for the type of church that is part of the Anglican communion and affiliated with TEC. As noted by Plaintiffs, a response of "category" thus could still point to "The Episcopal Church" as a source identifier for every church that is a member of The Episcopal Church. (Dkt. No. 586 at 27 - 29.) As opposed to "automobile" or "sandwich" which can be tested as "common" names (as used in the original Teflon survey), here there is no claim that there are multiple organizations titled "The Episcopal Church" in the world, compared to the multiple car manufacturers and sandwich makers, and the term "category" therefore does not answer the fundamental genericness question of whether a term refers to a class of product, here a religion, or a specific organization offering that product. Poret's survey is therefore irrelevant to genericness.

         Finally, Poret impermissibly used the term "trademark" in his survey. While Federal Rule of Evidence 704 permits an expert to offer an opinion on an "ultimate issue, " an expert is not permitted to "state[ ] a legal standard or draw[ ] a legal conclusion by applying law to the facts...." United States v. Mclver, 470 F.3d 550, 562 (4th Cir. 2006). See e.g., Priester v. Futuramic Tool & Eng'g Co., No. 2:14-CV-01108-DCN, 2017 WL 193577, at *4 (D.S.C. Jan. 18, 2017) (holding that testimony that determined defendant was "negligent" and was the "cause" of an explosion is impermissible, but testimony that defendant "did not act to prevent" a situation was permissible) (collecting cases). "Trademark" is a legal term, and a plaintiff must prove in any trademark infringement case that it owns a valid mark.

         In addition to asking the Court to permit an expert to make the legal conclusion of what constitutes a trademark, the definition is also overly narrow. Poret defines "trademark name" as: "a name that identifies one specific organization." (Dkt. No. 586-1 at 8.) The definition goes on to state that "[a] trademark name can only be used by one organization, or by branches of that organization, to identify itself." (Id.) It is true that a trademark identifies "the source of one seller's goods and distinguish[es] that source from other sources." 1 McCarthy on Trademarks and Unfair Competition ยง 3:1 (5th ed.). However, the second half of Poret's definition, permitting a respondent to answer "trademark" if a name is used by "branches of [that] organization, " bakes into the survey the question this case is attempting to answer. Namely, a respondent could decline to respond "trademark" where it knows of an organization calling itself an "episcopal church" that is actually a Disassociated Parish. There is further no definition of "branch" in the survey, permitting a respondent to answer "trademark" where it knows of The Episcopal Church and a parish associated with The Episcopal Church, but does not know whether the parish qualifies as a "branch" in this context. The Court cannot permit a survey to give ...

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